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Key takeaways from TCS’ analyst meet:  Management indicated Q4 is in-line with Q3 and pricing has been stable. We maintain our estimate of ~3.6% QoQ growth in USD revenue for Q4FY13 and FY13E EBIT margin of 27%.  CY13 to be better than CY12, primarily due to a stronger deal pipeline driven by : (1) likely uptick in discretionary spending in the US, led by waning pessimism over economic recovery and (2) higher acceptance of outsourcing in Europe due to economic and cost pressures. This is driving higher penetration in large corporates/ specific clients.  Management indicated FY14E growth to be front ended like FY13E (June and Sept quarter remain strongest for the IT industry). Other highlights  Better visibility on CY13 client budgets likely at the end of H1  Social Media, Analytics, Cloud and Mobility will be key growth drivers for the industry and TCS. Note: Analytics segment typically has smaller projects, but large volumes will make the vertical significant  Telecom and Hi-Tech verticals continue to be laggards with no visible signs of improvement. Other verticals steady  Specific to Q4: (1) one-time settlement of ~USD 30 mn offered by TCS (to the US court on a class action law suit) to impact Q4 P&L (cash flow to be impacted when the settlement is accepted), (2) net change in forex QoQ to be positive Rs 1.5 bn Valuation: Our FY14E /FY15E EPS estimates stand revised by ~5%/ 9% to Rs 83/ Rs 96 to factor in higher INR estimates of Rs 56.5/ Rs 58.5 respectively. Our revised TP stands at Rs 1,540 (based on 16xFY15E; Rs 1,414 earlier) implying 3% downside from CMP. While TCS has consistently delivered performance and maintained positive outlook on demand, we maintain HOLD given limited room for upside from CMP of Rs 1,584. The stock trades at 19x FY14E EPS of Rs 83 and 17x FY15E EPS of Rs 96. Regards, Priya Rohira (Executive Director – IT & Telecom) Institutional Equity Research Axis Capital Ltd. Tel.: + 91 22 4325 1104

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